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2 LEADERSHIP IN THE IRISH CIVIL SERVICE A 360 Review of Senior Management Capability i

3 Centre for Innovation and Structural Change (CISC) J.E Cairnes School of Business and Economics National University of Ireland, Galway Ireland April 2011 ISBN Dr Alma McCarthy JE Cairnes School of Business and Economics & CISC NUI Galway Galway Ireland AUTHORS Geraldine Grady CISC NUI Galway Galway Ireland Gillian Dooley School of Business & Humanities Limerick Institute of Technology Limerick Ireland This project is funded by the Irish Research Council for the Humanities and Social Sciences (IRCHSS). ii

4 FOREWORD I am pleased to introduce the Leadership in the Irish Civil Service: A 360 Review of Senior Management Capability report. The report is the culmination of work completed as part of a two year research project at the National University of Ireland, Galway. I welcome the focus of the study and the report findings which are both very timely and strategically important as we forge ahead with public sector reform and modernisation in Ireland. Recent reviews of various Government Departments and Offices, including the independent review of the Department of Finance conducted under the stewardship of Mr Rob Wright and seven Organisational Review Programme reports as part of the Transforming Public Services programme, clearly underscore the importance of effective leadership in the planning, delivery and management of value for money and quality public services. This report focuses specifically on the area of senior management leadership capability in the Irish Civil Service. The report findings draw attention to important areas of human resource management, talent management and leadership development that merit attention in the drive for modernisation and reform. True public service modernisation and reform is heavily dependent on the capability of senior leaders in the public service to identify the required changes and lead their civil service staff and organisations in an effective change management process. I would like to commend the research team at NUI Galway for their efforts in bringing this report to the public domain. It will inform public service policy and practice with regard to human resource management and leadership development. Mr Enda Kenny, TD Taoiseach April 2011 iii

6 LIST OF TABLES & FIGURES TABLE NO. TITLE PAGE 1 Public Service Reform Policies, Initiatives and Programmes 11 2 Leadership Code Domains and Competencies 23 3 Top Five Strengths and Associated Average Scores 32 4 Top Five Development Needs and Associated Average Scores 32 5 Key Leadership Strengths Referred to by Raters in Qualitative Comments 33 6 Key Leadership Development Needs Provided by Raters in Qualitative 37 Comments 7 Top Three Strengths for the Three Management Grades 44 8 Top Three Development Needs for the Three Management Grades 44 9 Top Three Strengths by Department Top Three Developmental Needs by Department Top Five Leadership Strengths and Development Needs 65 FIGURE NO. TITLE PAGE 1 The Leadership Code 19 2 Number of Participant Leaders by Department 27 3 Participants by Gender 28 4 Participants by Age in Years 28 5 Participants by Number of Years in Senior Management Position 28 6 Participants by Number of Years in the Public Service Degree Feedback Raters 29 8 Average Scores (All Participants) by Competency Domain 30 9 Averages of Key Talent Manager Competency Scores by Years in 42 Management 10 Average Scores for the Ability to Strengthen Competency of Current 43 Employees by Age 11 Average Scores for the Ensure Technical Proficiency Competency by 43 Education 12 Average Scores by Management Grade Based on Key Competencies of the 45 Strategist Domain 13 Average Scores by Management Grade Based on Key Competencies of the 45 Personal Proficiency Domain 14 Average score for Personal Proficiency Domain Based on Rating of 49 Comparison Item 15 Average Score for Each Domain based on Rating Source Categorisation of Under Estimation, Accurate Estimation, and Over Estimation Based on Self Versus Other Scores Across all Leadership Domains 52 v

7 ACKNOWLEDGEMENTS The researchers would like to thank the following for their assistance with this research project and report: The Government Departments and Office of the Revenue Commissioners who supported the project and gave access to the researchers for data collection. The Secretaries General in the various Departments who authorised access for data collection in their Departments. The 146 managers who agreed to participate in the study and partake in the 360 leadership assessment process and for completing their self assessment online questionnaires. The 1,054 raters who completed the online leadership assessments for other senior managers i.e. their managers, peers or direct reports. The Irish Research Council for the Humanities and Social Sciences who provided financial assistance to undertake this study. Dr James Cunningham, Director of CISC, for his helpful comments and guidance on the final report. vi

8 EXECUTIVE SUMMARY Effective leadership is a critical component of good public governance (OECD, 2004). It is an important variable that leads to enhanced management capacity and performance in public sector organisations. Ali (2007:132) underlines the importance of leadership in public sector reform stating that leadership will continue to be the challenge of the future. Any reform effort is doomed if this aspect is not addressed sufficiently well. A recent United Nations report on management competencies of senior public sector managers in the US, Canada, the UK, Australia and France found that effective leadership is a key senior management capability required to deliver more effective public governance (Charih et al., 2007). There is a clear link between effective leadership and change management capability among senior managers in public sector organisations. Ireland has engaged in various activities and programmes of reform over the past 20 years which draw attention to the role of leadership in delivering reform and change. The Irish public service modernisation programme (operated by the Department of An Taoiseach) has its roots in the Strategic Management Initiative (SMI) launched in 1994, the Delivering Better Government (DBG) (1996) Report and more recently the Transforming Public Services (TPS) Report (2008). Collectively, these reports have set the agenda for change in the Irish public and civil service. The objectives of these reform programmes are to ensure that, on an ongoing basis, the public service makes a greater contribution to national development, is a provider of excellent services to the public, and makes effective use of resources. These reviews clearly highlight the need for up skilling, improved performance management practices and the need for more effective leadership at senior management levels. Indeed, the critical role of leadership is specifically identified in the TPS Report (2008: 2) where it is argued that managerial and leadership capacity is a key enabler of change; therefore the new HRM agenda needs to cultivate and strengthen managerial and leadership capabilities among senior managers to ensure the delivery of better Government. Change in the Irish civil service largely rests with incumbent senior managers thus leadership capability is critical. The public service reform agenda will rely heavily on cultural change for its success. Culture, especially cultural change, is inextricably linked to leadership. We recognise the key role of leaders in defining visions and inspiring people to achieve them (OECD, 2008: 27). This study presents a very timely and 1

9 important review of leadership capability among the top three senior management grades in the Irish civil service. It is these managers who design, oversee and implement the changes required in the public service modernisation and public reform agendas in the short, medium and long term. The study provides a comprehensive assessment of leadership capability using a multi source assessment methodology which generated 1,200 completed self and other survey responses from Secretaries General, Assistant Secretaries general, Principal Officers and Assistant Principal Officers. Notwithstanding the existence of certain public and civil service sector context factors and constraints, our study finds that there is a clear acknowledgement and understanding of the need for change among senior civil service leaders. The findings indicate that leadership behaviours associated with personal proficiency receive the highest ratings for all senior managers who participated in the study. The personal proficiency leadership behaviours which received the highest leadership capability ratings in this study include competencies such as: learning agility and responsiveness which focuses on a leader s ability to seek information from a variety of sources and deal with uncertainty; balance work and non work needs including delegation; stress tolerance and resilience; self awareness and knowledge of leadership strengths and weaknesses; and the ability to focus personal time and energy on the most important issues to get things done. The lowest scoring domain on average for all senior managers is the human capital developer domain. Human capital development ensures that a long term perspective on the people in the organisation is at the forefront. There is a clear line of sight between future strategy and the skills and competencies that will be required to deliver that strategy. A focus on human capital development ensures that the right talent will be in place to achieve the longer term strategic objectives of the Government Departments through effective recruitment and selection practices and human resource development interventions. Our findings indicate that senior civil service managers need to realise the importance of building a workforce that can deliver results today but also have a plan and process to develop or acquire the technical and social competencies relevant to longerterm strategic civil service needs. The findings pertaining to current leadership capability, key leadership strengths and key leadership development needs provide important information on both the dominant focus and the time perspective of top leaders in the Civil Service. Overall, current leadership capability is stronger in the short term rather than in the long term, taking a more operational perspective rather than strategic perspective. Developing a long term 2

10 time perspective that leads to more strategic planning may be marked as an area for growth for the senior managers who participated in this study. Additionally, leaders were stronger at taking an organisational focus rather than an individual focus. To strengthen an individual focus, leaders need to develop and engage not only the current employees but, specifically, also need to focus on the next generation of leaders to build the leadership pipeline, so to speak in order to ensure the organisation has the longterm competencies required for future strategic success. Our study explores how the public service/irish Civil Service context specifically affects senior management leadership capability and effectiveness. The following are the most often cited themes that emerge: The balance between risk taking, maintaining the status quo and facilitating innovation and creativity is seen as a constraint to effective leadership. Comments from study participants tend to endorse the view that the opportunities for leadership can be limited by a risk averse context. The rigidity of the structure of the public sector and its bureaucratic form is seen as a significant sector specific factor that adversely impacts leadership effectiveness. There is a strong consensus among the respondents in our study that the influence of the political system is constraining to public sector leadership effectiveness and achievement of results. The civil service culture significantly influences leadership effectiveness. Effective communication strategies between staff and senior management is highlighted by participants as one organisational culture area requiring change. Many respondents refer to the current human and financial resource constraints as particularly challenging for effective leadership in the public sector. There is a feeling that many managers in the public sector are struggling to manage resources to effectively handle work priorities and achieve results. 3

11 The recruitment, selection and promotion constraints within the Irish Civil Service often restrict individuals in leadership positions in their capacity to effectively select, manage and develop staff. Many comments focus on the perceived lack of systems to enforce accountability as being particularly germane to the public and civil service context as a factor adversely affecting leadership. The following are the key recommendations from the multi source leadership assessment study which should facilitate improvements in senior management leadership capability and enable progress towards change: Performance management: The qualitative comments gathered from Secretary General to Assistant Principal Officer levels indicate that the current performance management system in the civil service acts as a constraining factor in enabling effective leadership. Participants referred to the lack of an effective carrot and stick to motivate, maintain and address staff performance and under performance. While significant progress has been made with the introduction and adoption of a performance management system for the public sector since the SMI in 2000 (see, for example, the Mercer Report ), participants in the current study refer to the need to integrate PMDS further with other HR functions such as discipline, reward and promotion. Given that PMDS is now in operation in most civil service Departments, it may be timely to review how the PMDS process can be more effectively designed to ensure it allow leaders to use the performance management system to discriminate across different performance levels. Many study participants referred to the rigidity of the industrial relations structure in the public service, arguing it to be particularly challenging for public service reform. An antecedent to effective leadership in any organisation is a leader s ability to motivate and reward effective staff performance and address under performance. Senior leaders in this study report that this is not currently the case for them and that they are managing and leading without necessarily having the authority and adequate control mechanisms to effect real change. It is 1 Mercer (2004). Evaluation of PMDS in the Civil Service. May. 4

12 important, therefore, that the performance management system is reviewed to ensure it assists leaders to more effectively manage staff across a variety of HR areas. Risk taking, creativity and innovation: There is a strong sense that risk taking, creativity and innovation are stifled and discouraged among the study respondents. Rather, the prevailing culture calls for leaders to behave in ways which are more conservative and risk averse at the expense of acting in a more creative and innovative manner. Our survey findings clearly found the need for senior civil service leaders to move away from the current management ethos that prevails to one that is more entrepreneurial and innovative. Unlike other organisations, civil service leaders work activities and practices are heavily influenced by the political system. Many of our study participants referred to the difficulty of managing change in an organisation which can be very much influenced by changing political agendas. There was a sense that senior civil service managers need to be more assertive about the advice they provide to Ministers and have conviction to present policies and plans which may not always align with the political and/or Governmental stance. The need for this assured thinking and argumentation was drawn out in the recently published external review of the Department of Finance (Wright, 2010). In the journey towards public service reform, the changes required to facilitate a more innovative and entrepreneurial decision making environment for senior civil service leaders will have to be explored. Our study participants believe that the existing context is prohibitive and stifles risk taking and creative leadership practices. Human capital development: Leadership behaviours associated with human capital development were the lowest rated in terms of senior civil service management capability. Furthermore, many of the qualitative comments provided by the participants indicated leadership development needs in the human capital development domain. These behaviours include: mapping the knowledge, skills and abilities of staff across the organisation to future talent needs in the organisation; aligning what the organisation offers employees with the expectations of next generation talent; and helping staff manage and develop their careers. The focus on more short term human resource management issues at the cost of longerterm planning is seen as a key area for improvement among senior leaders. 5

13 The recruitment and selection constraints within the Irish civil service have often restricted individuals in leadership positions in their capacity to effectively select, manage and develop staff. For example, for administrative grades up to and including Principal Officer level, vacancies tend to be filled from competition panels determined from generalist competencies. However, the development of specialised expertise and capability is an important medium to long term objective for the civil service. Indeed, the greater focus on generalist rather than specialist expertise is one area specifically highlighted as requiring change in the external Department of Finance Review published in February A talent management and succession planning strategy and plan needs to be developed either at Departmental level or civil service level which has a focus on the mediumto long term talent requirements of the service. Such a strategy and plan should be developed in close alignment with the public sector reform agenda. Once such a talent management and development strategy is formulated, action plans can be established to identify how best to achieve these outcomes. The development of leaders at junior and middle management grades should also be at the core of such a strategy given the need to build future leadership capability and talent. Senior management leadership development: In all organisations, the culture that prevails is an important determinant of employee and managerial behaviour and work related outcomes. The influence of senior level managers, who act as role models, was highlighted in our study. Consequently there is a real need for a bespoke tailored leadership development programme for all top level leaders in the civil service should be developed. The programme should aim to develop and enhance the critical leadership skills required of effective civil service senior managers as set out in this study. This programme could build on some of the programmes that were offered in the past for a number of senior managers, such as the IPA Leadership Challenge programme. There was also a strong sense that senior leaders need to be held accountable for delivering effective leadership and change and that this is currently not necessarily the case. A senior management leadership development programme would call attention to the leadership behaviours that are required of effective leaders and focus on changing ineffective leadership behaviours. The programme should be designed in conjunction with a variety of key stakeholders. The programme should hold leaders accountable for change and be designed as 6

14 a longitudinal leadership development intervention, thereby maximising learning transfer and behavioural change on the job. Participation should be mandatory for all Secretaries General, Assistant Secretaries General and Principal Officers. Examples of how to design and deliver such programmes are available at an international level. For example, Sweden set up the National Council for Quality and Development which places specific emphasis on public service leadership development. Moving from Short to Long Term Focus: The findings of our report point to the need for senior management in the civil service to develop a more long term perspective and orientation rather than focusing on the shortterm. This is particularly evidenced in the area of building talent among civil service staff with a focus on future needs. Many of the qualitative comments regarding effective leadership refer to the need for senior leaders to clearly and consistently articulate a direction for future initiatives to internal and external stakeholders. Such long term orientation would enable leaders to gauge how to best position Government Departments for anticipated future challenges and opportunities. 7

15 BACKGROUND & STUDY OBJECTIVES The Irish Public Service modernisation programme, which is ongoing for the past 15 years, has been grounded in the Strategic Management Initiative (SMI) introduced in The objective of the SMI was to present public service management with an opportunity to make a substantial contribution to national development through the provision of services to the public which were both excellent in quality and effective in delivery (SMI, 1994). An implementation group, comprising of a group of Departmental Secretaries General, was tasked to consider the development of a strategic management process in the Irish civil service, to facilitate the preparation of strategy statements at the individual Department level, and to oversee the allocation of a fund to assist Departments to acquire expertise in strategic planning and organisation development (SMI, 1994). In 1996, the Delivering Better Government (DBG) 2 report was published which adopted the framework and approach proposed in SMI to establish a vision for the civil service based on six key organisational themes. These included a greater openness and accountability, a mission of quality customer service, and the efficient and fair operation of simplified regulations. At Government Department level, these developments were to be achieved by organisational improvements in human resource management, financial management and enhanced information systems management. In relation to the culture and HR issues in the civil service, the following vision was set out in the DBG (1996) report: the civil service should be a high performance, open and flexible organisation operating to the highest standards of integrity, equity, impartiality and accountability (p. 10) and in doing so making use of effective human resource management systems to ensure that each person who works in the civil service can develop to his/her maximum potential in contributing to the attainment of stated goals (p. 11). In the mid 1990s, there was an increasing emphasis on the role of the wider public service and the importance of its effective performance as the key driver of national 2 Delivering Better Government (DBG) (1996) Second Report to Government of the Co ordinating Group of Secretaries A Programme Change for the Irish Civil Service. 8

16 success, both as a provider of economic and social services and as a facilitator and regulator of private enterprise (DBG, 1996). The focus on service delivery by civil service staff was gaining currency. Moreover, the National Economic and Social Council (NESC) (1996: 15) emphasised the urgency surrounding the SMI, stating that previous initiatives were less than successful and suggested a nothing will ever really change attitude existed in the public service. The NESC continued to argue that the pace of change needed greater urgency and suggested that, whilst the development of blueprints to improve long term strategic planning was useful, a shift from conceptualisation to implementation was urgently required (NESC, 1996). One of the key organisational improvement areas identified in DBG, and criticised by bodies such as the NESC, was the human resource management strategy within the Irish civil service. The Government commissioned an evaluation of these reforms which was prepared by PA Consulting Group in The report found that the civil service was a more effective organisation in 2002 than ten years previously and much of the change was attributed to the SMI/DBG programmes (PA Consulting, 2002). Furthermore, the report states that managerial and leadership capacity is a key enabler of change emphasising that the new HRM agenda needs to cultivate and strengthen managerial and leadership capabilities among senior managers through development of specific needs, rotation and lateral movement (PA Consulting, 2002: 10). The OECD (2008) reviewed the progress of the Irish public and civil service modernisation agenda. They found that while Ireland is on a sound path of modernisation, it can make further improvements in the necessary reforms by focusing on speed and progression thus reinforcing the changes. The report strongly advocates that success in achieving the vision of a more integrated Public Service will require strong leadership at both political and administrative levels to move from a traditional control position, to one of vision, support and direction in developing the modernisation and change agenda (OECD, 2008: 14). In November 2008, the Irish Government commissioned a taskforce to respond to the OECD s report which resulted in the establishment of the Transforming Public Services taskforce. The key areas of improvement identified by the taskforce in the HRM/HRD spheres involved changes from compliance and input controls to a focus on outputs and outcomes, greater efficiency and flexibility, accountability in the performance management system, and 9

17 mobility and redeployment of staff resources in an efficient and effective manner across the service. Furthermore, they assert that the foundation for the success of these reforms will be strong leadership to deliver better Government. They too recognise that the reform agenda will require a major cultural change to ensure its success, but emphasise that it will need to be inextricably linked with more effective civil service leadership. The Organisational Review Programme (ORP) is part of the latest phase of public service modernisation led by the Department of An Taoiseach which commenced in The ORP is designed to assess the capacity of Government Departments and Offices to meet the challenges of the future in three broad areas: strategy, delivery of customer service, and performance evaluation. To date, two review reports have been published reviewing seven Government Departments and Offices: Department of Agriculture, Fisheries and Food; Department of Enterprise, Trade and Employment; Department of Transport; Department of Health and Children; Office of the Revenue Commissioners; Central Statistics Office; and the Property Registration Authority 3&4. The 2008 report identified Civil Service challenges arising from the ORP review at that time stating staff tend to be significantly more satisfied with the leadership displayed by their immediate managers than that displayed by the top management at Management Advisory Committee (MAC) level (p. 69). The MAC group is typically made up of the Minister(s), the Secretary General and the Assistant Secretaries. Internal leadership, communication practices, and performance management and evaluation in the Civil Service are specific areas which have been identified as requiring action in the 2008 and 2010 ORP reports for the participating Government Departments to meet the challenges of the future. This study focuses on senior management leadership at Secretary General, Assistant Secretary General and Principal Officer levels, thereby exploring leadership capability at MAC level as well as PO level. We see, therefore, a broad range of reports, taskforce findings and policy statements underlining the critical role of the management and leadership capability of senior management in the Irish civil service to achieve public service modernisation. 3 Department of An Taoiseach (2008). First Report of the Organisational Review Programme. Dublin: The Stationery Office. 4 Department of An Taoiseach (2010). Second Report of the Organisational Review Programme. Dublin: The Stationery Office. 10

18 However, relatively little research has been undertaken in the past fifteen years to establish leadership capability in the Irish civil service with the notable exception of the very recent Organisational Review Programmes for four Government Departments and three Offices. In his independent assessment of the recently adopted ORP process, Prof John Murray (2010) highlights the value of independent outsides being involved in reviews and evaluations of capability and performance and highlights this as a feature of the ORP process which could be changed going forward. This study builds on the recent work of the ORP process by providing an external assessment of senior management capability in the Irish Civil Service using a 360 degree assessment methodology. Table 1 below summarises the various public service reform policies, initiatives and programmes of relevance to public service leadership over the past 20 years, Table 1 Public Service Reform Policies, Initiatives and Programmes POLICY/INITIATIVE KEY FOCUS Strategic Management Initiative (SMI) 1994 Delivery Better Government (DBG) 1996 Evaluation of the Progress of the SMI/DBG Modernisation Programme 2002 OECD 2008 Transforming Public Services 2008 to date Improvements in public service quality and delivery Greater openness and accountability A mission of quality customer service Efficient and fair operation of simplified regulation Organisational improvements in human resource management, financial management and enhanced information systems managements New HRM agenda needed to cultivate and strengthen managerial and leadership capabilities among senior managers Strong leadership at both political and administrative levels to move from a traditional control position to one of vision, support and direction in developing the modernisation and change agenda Greater efficiency and flexibility, accountability in the performance management system, and mobility and redeployment of staff resources in an efficient and effective manner across the service Organisational Review Programmes established 11

19 The following are the specific objectives of the current study and report: to evaluate leadership capability in senior management in the Irish Civil Service using a multi rater assessment process to develop a multi perspective model of the antecedents of effective leadership among senior civil servants in the Irish Civil Service to develop a set of recommendations for Civil Service organisations and policy makers aimed at more effectively managing and developing senior human resources for the achievement of better public service delivery through more effective leadership. 12

20 EFFECTIVE LEADERSHIP Effective leadership is a critical component of good public governance (OECD, 2004). It is an important variable that leads to enhanced management capacity and performance in public sector organisations. Ali (2007:132) underlines the importance of leadership in public sector reform stating that leadership will continue to be the challenge of the future. Any reform effort is doomed if this aspect is not addressed sufficiently. A recent United Nations report on management competencies of senior public sector managers in the US, Canada, the UK, Australia and France found that effective leadership is a key senior management capability required to deliver more effective public governance (Charih et al., 2007). There is a clear link between effective leadership and change management capability among senior managers in public sector organisations. This section of the report explores different leadership theories and approaches. EFFECTIVE LEADERSHIP: THEORIES, TYPOLOGIES & TAXONOMIES The search for an understanding of leadership has been ongoing for centuries. Both organisations and academics alike are preoccupied with the concept of leadership and what constitutes effective leadership. In the case of leadership, perhaps the French novelist Remy De Gourmant (in Bass & Bass, 2008: 3) is accurate in stating that a definition is a sack of flour compressed into a thimble. We know good (and poor) leadership when we see it, yet it is not easily distilled into a one size fits all approach. This section of the report presents the latest thinking in leadership theory, with a particular focus on leadership in the public service. CLASSICAL LEADERSHIP THEORY The earliest written principles of leadership go back almost to the emergence of civilisation and can be found in Egypt in the Instruction of Ptah Hotep (c.2300 BC), an ancient Egyptian official and city administrator. The earliest theories were built on the assumption that leadership is rooted in the characteristics an individual possesses (Bass & Bass, 2008). This traditional trait theory or Great Man view dominated empirical and theoretical work in leadership for decades and, while intuitively 13

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